NEW YORK--(BUSINESS WIRE)--Twenty-First Century Fox, Inc. (“21st Century Fox” or the “Company” –
NASDAQ: FOXA, FOX) today announced that it intends to spin off to 21st
Century Fox shareholders a portfolio of its highly-rated news, sports
and broadcast businesses to create a new “Fox,” which will be a growth
company centered on live news and sports brands, anchored by the
strength of the Fox Network.

The new “Fox” will include iconic branded properties Fox News Channel,
Fox Business Network, Fox Broadcasting Company, Fox Sports, Fox
Television Stations Group, and sports cable networks FS1, FS2, Fox
Deportes and Big Ten Network (BTN). It will also include the Company’s
studio lot in Los Angeles and equity investment in Roku.

The new Fox will house the #1 cable news channel in the country, the
most watched business news channel, and a stations group that is present
in 9 out of the 10 largest metro areas in the U.S. Its broadcast and
cable sports brands will have coveted, long-term sports rights to the
NFL, MLB, World Cup soccer and NASCAR. The new Fox will have a strong
financial profile, supported by peer-leading growth and differentiated
free cash flow generation, and will be positioned to continue to deliver
consistent growth driven by affiliate rate increases, retransmission
growth and strong advertising demand for its live content and
entertainment product.

21st Century Fox Executive Chairman Rupert Murdoch said: “The new Fox
will draw upon the powerful live news and sports businesses of Fox, as
well as the strength of our Broadcast Network. It is born out of an
important lesson I’ve learned in my long career in media: namely,
content and news relevant to viewers will always be valuable. We are
excited by the possibilities of the new Fox, which is already a leader
many times over.”

In addition to the spin-off, 21st Century Fox today separately announced
that the Company has entered into a definitive agreement to combine the
rest of its businesses with Disney (NYSE: DIS), including the Company’s
film and television studios, cable entertainment networks and
international TV businesses.

Combining with Disney are 21st Century Fox’s critically acclaimed film
production businesses including Twentieth Century Fox, Fox Searchlight
and Fox 2000, which together offer diverse and compelling storytelling
businesses and are the homes of Avatar, X-Men, Fantastic Four and
Deadpool, as well as The Grand Budapest Hotel, Hidden Figures,
Gone Girl, The Shape of Water, and The Martian – and its
storied television creative units, Twentieth Century Fox Television, FX
Productions and Fox21, who have brought The Americans, This Is Us,
Modern Family, The Simpsons, and so many more hit TV series to
viewers across the globe. Disney will also acquire FX Networks, Fox
Sports Regional Networks, Fox Networks Group International, Star India,
and 21st Century Fox’s interests in National Geographic Partners, Hulu,
Sky, Tata Sky and Endemol Shine Group. 21st Century Fox remains
committed to completing its proposed acquisition of the shares in Sky it
does not own, and anticipates that the acquisition of Sky will close by
June 30, 2018.

Mr. Murdoch continued: “As a result of the transformative transactions
proposed today, we are paving the way for the new Fox, as well as a
better Disney, to chart a course across a broad frontier of opportunity.
We have always made a commitment to deliver more choices for customers;
provide great storytelling, objective news, challenging opinion and
compelling sports. Through today's announcements we are proud to
recommit to that promise and enable our shareholders to benefit for
years to come through ownership of two of the world's most iconic,
relevant, and dynamic media companies. They will each continue to be
leaders in creating the very best experiences for consumers.”

New Fox Assets

Fox’s assets will include:

Fox News Channel (FNC): 24-hour all-encompassing news service
dedicated to delivering breaking news as well as political and business
news. FNC has been the #1 cable news channel in the country for 63
straight quarters, and more recently has been the #1 basic cable
network. FNC is available in approximately 90 million homes and
dominates the cable news landscape, routinely notching the top ten
programs in the genre.

Fox Broadcasting Company (FOX):home to some of the
highest-rated and most acclaimed series on television as well as the
most sought after sports properties. FOX is viewed by nearly 100 million
households each month, airing 15 hours of primetime programming a week,
as well as major sporting events and Sunday morning news. Through the
FOX NOW app, FOX viewers can watch full episodes of their favorite FOX
shows on a variety of digital platforms, while enjoying enhanced
interactive and social capabilities around those shows.

Fox Business Network (FBN): financial news channel delivering
real-time information across all platforms that impact both Main Street
and Wall Street, Fox Business Network has been the #1 business network
for 4 consecutive quarters. FBN launched in October 2007 and is
available in more than 80 million homes in major markets across the
United States. The network has bureaus in Chicago, Los Angeles,
Washington, DC and London.

FOX Television Stations Group: one of the nation's largest
owned-and-operated network broadcast groups, comprising 28 stations in
17 markets and covering over 37% of U.S. television homes. This includes
a presence in nine out of the 10 largest metro areas in the U.S.
including seven duopolies in the top 10 markets: New York, Los Angeles,
Chicago, Dallas, San Francisco, Washington, D.C. and Houston; as well as
duopolies in Phoenix, Minneapolis, Orlando and Charlotte.

FS1 and FS2: FS1 is a popular sports cable network launched in
2013 in approximately 90 million homes boasting nearly 5,000 hours of
live event, news and original programming annually. FS1 has several
pillar sports: college basketball and football, MLB, NASCAR, NFL
(ancillary programs), international soccer, Bundesliga, UFC, Premier
Boxing Champions (PBC) and USGA. Major events televised on FS1 include
the U.S. Open, MLB Postseason, the FIFA 2018 and 2022 World Cup and the
FIFA Women’s World Cup in 2019. FS2 was founded in 2013 and is focused
on extreme sports, including skateboarding, snowboarding, wakeboarding,
motocross, surfing, mixed martial arts, BMX and FMX. FS2 is available in
approximately 50 million homes.

Big Ten Network: the first internationally distributed network
dedicated to covering America’s most storied collegiate conferences.
Covering over 1,000 sporting events each year, including football,
basketball, Olympic sports and championship events and award-winning
original programming, in-depth studio analysis and classic games. The
network is in approximately 50 million homes across the United States
and Canada, including carriage by all the major video distributors.

New Fox Financial Information

Using Fiscal 2017 as a base, Fox is expected to have annual revenue of
approximately $10 billion and EBITDA of approximately $2.8 billion. The
Company will have an investment grade balance sheet conservatively
levered with a maximum of $9 billion of new gross debt or under 3x net
leverage on day one. Following the spin-off, Fox expects to continue to
pay shareholders a strong regular dividend, with the initial rate to be
determined prior to the completion of the spin-off.

Additional Transaction Details

The spin-off transaction will be taxable to 21st Century Fox, but not to
its shareholders. The new Fox will receive a step-up in its tax basis
commensurate with the amount of the corporate tax relating to the
spin-off that will generate annual cash tax savings over the next 15
years.

Prior to completion of the spin-off, new Fox will pay an $8.5 billion
cash dividend to 21st Century Fox, representing an estimate of such tax
liability. If the final tax liability of 21st Century Fox is less than
such amount, the first $2 billion of that adjustment will be made by a
net reduction in the amount of the cash dividend to 21st Century Fox
from new Fox. The amount of such tax liabilities will depend on several
factors, including tax rates in effect at the time of closing as well as
market values of Fox following the closing.

Upon closing of the spin-off transaction, 21st Century Fox’s
shareholders would receive one share of common stock in new Fox for each
same class 21st Century Fox share currently held. Following the
separation, new Fox would maintain two classes of common stock: Class A
Common and Class B Common Voting Shares. Details of the spin-off
transaction distribution will be included in the registration statement
that will be filed with the Securities and Exchange Commission.

As part of the definitive agreement with Disney announced today, 21st
Century Fox shareholders will receive 0.2745 Disney shares for each 21st
Century Fox share in the merger. The per share consideration is subject
to adjustment up or down for certain tax liabilities arising from the
spinoff and other transactions related to the acquisition. Terms of the
transaction call for Disney to issue approximately 515 million new
shares to 21st Century Fox shareholders, representing approximately a 25
percent stake in Disney on a pro forma basis. The transaction values the
merged 21st Century Fox business at $28 per share using a reference
Disney share price of $102 and at nearly $30 per share based on Disney’s
closing share price on December 13, 2017. This equates to a total
enterprise value of approximately $69 billion.

The merger is subject to customary conditions, including regulatory and
shareholder approval.

Advisors

Goldman, Sachs & Co. is acting as the lead financial advisor to the
Company and provided a bridge loan commitment of up to $9 billion to the
new Fox. Centerview Partners and Deutsche Bank are also acting as
financial advisors to the Company. Skadden, Arps, Slate, Meagher & Flom
LLP, Hogan Lovells, and Simpson Thacher & Bartlett are acting as legal
advisors to the Company.

Conference Call Details

21st Century Fox senior executives will host a conference call this
morning, Thursday, December 14, 2017 at 9:00am
(New York) to discuss the creation of new “Fox” and the merger of
certain assets with Disney for analysts and investors. Reporters are
invited to join the call on a listen-only
basis.

Transcript of the presentation will also be made available shortly after
the call, accessible via the same link.

About 21st Century Fox

21st Century Fox is one of the world's leading portfolios of cable,
broadcast, film, pay TV and satellite assets spanning six continents
across the globe. Reaching more than 1.8 billion subscribers in
approximately 50 local languages every day, 21st Century Fox is home to
a global portfolio of cable and broadcasting networks and properties,
including FOX, FX, FXX, FXM, FS1, Fox News Channel, Fox Business
Network, FOX Sports, Fox Sports Network, National Geographic Channels,
Star India, 28 local television stations in the U.S. and more than 350
international channels; film studio Twentieth Century Fox Film; and
television production studios Twentieth Century Fox Television and a 50
per cent ownership interest in Endemol Shine Group. The Company also
holds approximately 39.1 per cent of the issued shares of Sky, Europe’s
leading entertainment company, which serves nearly 23 million households
across five countries. For more information about 21st Century Fox,
please visit www.21CF.com.

Important Information About the Transaction and
Where to Find It

In connection with the proposed transaction between The Walt Disney
Company (“Disney”) and Twenty-First Century Fox, Inc. (“21CF”), Disney
and 21CF will file with the Securities and Exchange Commission (the
“SEC”) a registration statement on Form S-4 that will include a joint
proxy statement of Disney and 21CF that also constitutes a prospectus of
Disney. 21CF will file with the SEC a registration statement for a newly
formed subsidiary (“New Fox”), which is contemplated to own certain
assets and businesses of 21CF not being acquired by Disney in connection
with the proposed transaction. 21CF and Disney may also file other
documents with the SEC regarding the proposed transaction. This document
is not a substitute for the joint proxy statement/prospectus or
registration statement or any other document which 21CF or Disney may
file with the SEC. INVESTORS AND SECURITY HOLDERS OF 21CF AND DISNEY
ARE URGED TO READ THE REGISTRATION STATEMENTS, THE JOINT PROXY
STATEMENT/PROSPECTUS AND ALL OTHER RELEVANT DOCUMENTS THAT ARE FILED OR
WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO
THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND
RELATED MATTERS. Investors and security holders may obtain free
copies of the registration statements and the joint proxy
statement/prospectus (when available) and other documents filed with the
SEC by 21CF and Disney through the web site maintained by the SEC at www.sec.gov
or by contacting the investor relations department of:

21CF, Disney and their respective directors and executive officers may
be deemed to be participants in the solicitation of proxies in respect
of the proposed transaction. Information regarding 21CF’s directors and
executive officers, including a description of their direct interests,
by security holdings or otherwise, is available in 21CF’s Annual Report
on Form 10-K for the year ended June 30, 2017 and its proxy statement
filed on September 28, 2017, which are filed with the SEC. Information
regarding Disney’s directors and executive officers, including a
description of their direct interests, by security holdings or
otherwise, is available in Disney’s Annual Report on Form 10-K for the
year ended September 30, 2017 and its proxy statement filed on January
13, 2017, which are filed with the SEC. A more complete description will
be available in the registration statement on Form S-4, the joint proxy
statement/prospectus and the registration statement of New Fox.

No Offer or Solicitation

This communication is for informational purposes only and is not
intended to and does not constitute an offer to subscribe for, buy or
sell, or the solicitation of an offer to subscribe for, buy or sell, or
an invitation to subscribe for, buy or sell any securities or a
solicitation of any vote or approval in any jurisdiction, nor shall
there be any sale, issuance or transfer of securities in any
jurisdiction in which such offer, invitation, sale or solicitation would
be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. No offer of securities shall be made
except by means of a prospectus meeting the requirements of Section 10
of the Securities Act of 1933, as amended, and otherwise in accordance
with applicable law.

Cautionary Notes on Forward Looking Statements

This communication contains “forward-looking statements” within the
meaning of the federal securities laws, including Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. In this context, forward-looking
statements often address expected future business and financial
performance and financial condition, and often contain words such as
“expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,”
“will,” “would,” “target,” similar expressions, and variations or
negatives of these words. Forward-looking statements by their nature
address matters that are, to different degrees, uncertain, such as
statements about the consummation of the proposed transaction and the
anticipated benefits thereof. These and other forward-looking statements
are not guarantees of future results and are subject to risks,
uncertainties and assumptions that could cause actual results to differ
materially from those expressed in any forward-looking statements,
including the failure to consummate the proposed transaction or to make
any filing or take other action required to consummate such transaction
in a timely matter or at all, are not guarantees of future results and
are subject to risks, uncertainties and assumptions that could cause
actual results to differ materially from those expressed in any
forward-looking statements. Important risk factors that may cause such a
difference include, but are not limited to: (i) the completion of the
proposed transaction may not occur on the anticipated terms and timing
or at all, (ii) the required regulatory approvals are not obtained, or
that in order to obtain such regulatory approvals, conditions are
imposed that adversely affect the anticipated benefits from the proposed
transaction or cause the parties to abandon the proposed transaction,
(iii) the risk that a condition to closing of the transaction may not be
satisfied (including, but not limited to, the receipt of legal opinions
and rulings with respect to the treatment of the transaction under U.S.
and Australian tax laws), including the tax-free treatment of the
transaction to 21CF’s stockholders of the distribution of shares of New
Fox common stock, (iv) the risk that the anticipated tax treatment of
the transaction is not obtained, (v) an increase or decrease in the
anticipated transaction taxes (including due to any changes to tax
legislation and its impact on tax rates (and the timing of the
effectiveness of any such changes)) to be paid in connection with the
separation prior to the closing of the transactions could cause an
adjustment to the exchange ratio, (vi) potential litigation relating to
the proposed transaction that could be instituted against 21CF, Disney
or their respective directors, (vii) potential adverse reactions or
changes to business relationships resulting from the announcement or
completion of the transactions, (viii) risks associated with third party
contracts containing consent and/or other provisions that may be
triggered by the proposed transaction, (ix) negative effects of the
announcement or the consummation of the transaction on the market price
of 21CF and/or Disney’s common stock, (x) risks relating to the value of
the Disney shares to be issued in the transaction and uncertainty as to
the long-term value of Disney’s common stock, (xi) the potential impact
of unforeseen liabilities, future capital expenditures, revenues,
expenses, earnings, synergies, economic performance, indebtedness,
financial condition and losses on the future prospects, business and
management strategies for the management, expansion and growth of
Disney’s operations after the consummation of the transaction and on the
other conditions to the completion of the merger, (xii) the risks and
costs associated with, and the ability of Disney to, integrate the
businesses successfully and to achieve anticipated synergies, (xiii) the
risk that disruptions from the proposed transaction will harm 21CF’s or
Disney’s business, including current plans and operations, (xiv) the
ability of 21CF or Disney to retain and hire key personnel, (xv) adverse
legal and regulatory developments or determinations or adverse changes
in, or interpretations of, U.S., Australian or other foreign laws, rules
or regulations, including tax laws, rules and regulations, that could
delay or prevent completion of the proposed transactions or cause the
terms of the proposed transactions to be modified, (xvi) the risk that
New Fox, as a new company that currently has no credit rating, will not
have access to the capital markets on acceptable terms, (xvii) the risk
that New Fox may be unable to achieve some or all of the benefits that
21CF expects New Fox to achieve as an independent, publicly-traded
company, (xviii) the risk that New Fox may be more susceptible to market
fluctuations and other adverse events than it would have otherwise been
while still a part of 21CF, (xix) the risk that New Fox will incur
significant indebtedness in connection with the separation and
distribution, and the degree to which it will be leveraged following
completion of the distribution may materially and adversely affect its
business, financial condition and results of operations, (xx) the
ability to obtain or consummate financing or refinancing related to the
transaction upon acceptable terms or at all, (xxi) as well as
management’s response to any of the aforementioned factors. These risks,
as well as other risks associated with the proposed transactions, will
be more fully discussed in the joint proxy statement/prospectus that
will be included in the registration statement on Form S-4 that will be
filed with the SEC in connection with the proposed transactions, as well
as in the registration statement filed with respect to New Fox. While
the list of factors presented here is, and the list of factors to be
presented in the registration statement on Form S-4 and the registration
statement of New Fox are, considered representative, no such list should
be considered to be a complete statement of all potential risks and
uncertainties. Unlisted factors may present significant additional
obstacles to the realization of forward looking statements. Consequences
of material differences in results as compared with those anticipated in
the forward-looking statements could include, among other things,
business disruption, operational problems, financial loss, legal
liability to third parties and similar risks, any of which could have a
material adverse effect on 21CF’s or Disney’s consolidated financial
condition, results of operations, credit rating or liquidity. Neither
21CF nor Disney assumes any obligation to publicly provide revisions or
updates to any forward looking statements, whether as a result of new
information, future developments or otherwise, should circumstances
change, except as otherwise required by securities and other applicable
laws.